Billionaire slams Xerox sale, urges rejection

Updated 2:51 pm, Monday, February 12, 2018

A file photo of Carl Icahn in New York City in November 2015. (Karsten Moran/The New York Times)

A file photo of Carl Icahn in New York City in November 2015. (Karsten Moran/The New York Times)

Photo: KARSTEN MORAN / New York Times

Billionaire slams Xerox sale, urges rejection

1 / 1

Back to Gallery

From his perch as Xerox’s largest individual investor, billionaire Carl Icahn pleaded with fellow shareholders to reject an agreement for Fujifilm Holdings to take over the Norwalk-based giant.

Xerox announced the $6.1 billion deal Jan. 31 after coming under pressure during the past year from Icahn and fellow investor Darwin Deason to undertake changes to increase the value of its shares. Xerox CEO Jeff Jacobson told investors late last month he did not speak with Icahn during negotiations with Fujifilm.

Since the merger announcement, Xerox shares are down 8 percent to about $30 as of Monday afternoon, with shares up 2 percent on the day.

In a joint letter with Deason to shareholders posted Monday, Icahn cited Fujifilm CEO Shigetaka Komori saying the deal will allow his company “to take control of Xerox without spending a penny” as quoted by the Nikkei Asian Review.

“The structure reminds us of a timeless anecdote about two brothers who are bequeathed a vast estate. The older brother receives a ... controlling stake and an instruction to keep the interests of his younger brother in mind,” Icahn and Deason stated in their joint letter to shareholders. “Fast forward a few years, and you’ll find the older brother living in a mansion and driving a Rolls-Royce while the younger brother lives in a shack and drives an old beat-up hatchback.”

A Xerox spokesman forwarded an official statement from Xerox that the company considered “several other options in detail” and concluded the Fuji Xerox combination as best for shareholders.

“The transaction provides shareholders with the opportunity to benefit from ownership in a combined company that has enhanced growth prospects and a stronger financial profile to support future value creation, as well as an immediate substantial dividend payment,” Xerox stated.

Icahn and Deason propose an alternative scenario for shareholders of “freeing the company from the shackles” of the existing Fuji Xerox joint venture, cutting costs and finding ways to commercialize breakthrough technologies from the Xerox Palo Alto Research Center, among other possibilities.